SINGAPORE: An Introduction to Capital Markets: Domestic

Overview of Singapore’s Debt Capital Market 

As with equity offerings, offers of debt securities to investors in Singapore are regulated under the Securities and Futures Act 2001 of Singapore (SFA). The SFA requires all offers of debt securities to be accompanied by a prospectus and a product highlights sheet registered with the Monetary Authority of Singapore (MAS), unless otherwise exempted.

Listed issuers making offers of debt securities to the retail public may be exempted from prospectus registration requirements if they lodge an offer information statement with the MAS under Section 277 of the SFA. The Exempt Bond Issuer Framework and the Bond Seasoning Framework ‒ introduced in 2016 to encourage high-quality issuers to tap the retail market ‒ provide two further exemptions from prospectus requirements.

In the wholesale bond market, issuers generally rely on the exemption from prospectus requirements for offers of debt securities made to the certain classes of investors. These investors include:

• institutional investors under Section 274 of the SFA; and

• accredited investors and certain other specified persons under Section 275 of the SFA, subject to certain conditions ‒ for example, the offer must not be accompanied by an advertisement making an offer or calling attention to the offer or intended offer and, for specified persons relying on Section 275(1A) of the SFA, the consideration for securities must be not less than SGD200,000.

Notable developments

The Singapore government has been a strong and pro-active proponent for the adoption of distributed ledger technology (DLT) and asset tokenisation to enhance efficiency and increase accessibility within Singapore’s financial markets. Against this backdrop, the following initiatives by the Singapore authorities were launched.

• Led by the MAS, Project Guardian is a collaborative initiative between policymakers and financial institutions. Its aims include the enabling of interoperability of digital securities across different platforms and among participating entities. In November 2024, the Project Guardian project group introduced the Guardian Fixed Income Framework, which is an initial set of non-prescriptive standards and industry best practices for tokenised fixed income assets to enable the adoption of asset tokenisation for fixed income products within financial services.

• The Singapore Exchange Securities Trading Limited (“SGX”) launched the Digital Bond Listing framework and the Digital Assets Register pilot to to help issuers and investors by increasing visibility and transparency of digital assets. The aim is to promote the growth of tokenised traditional financial instruments by providing digital bond issuers with the same benefits of listing as enjoyed by their traditional counterparts.

Singapore also continues to strengthen its dominance in ESG issuances within the Association of South-East Asian Nations (ASEAN). The Singapore government announced in its 2022 Budget that up to SGD35 billion of green bonds will be issued by the government and statutory boards by 2030. In April 2023, it was announced that the MAS will set aside SGD15 million to enhance and extend the sustainable bond and loan grant schemes to support transition instruments until 31 December 2028, with safeguards put in place to reduce the risk of “transition-washing”.

In November 2024, the MAS announced new green finance and capital markets initiatives to strengthen financial co-operation with China. These initiatives include:

• establishing the China‒Singapore Green Finance Task Force to expand the Common Ground Taxonomy, with the goal of enabling easier comparison between the green taxonomies of Singapore and China and facilitating inter alia cross-border green bond issuance ‒ with industry partners from both countries collaborating on Panda Bond issuances through a Green Corridor to catalyse green financing flows;

• exploring a pilot with Singapore and Chinese banks to enhance international investors’ access to China’s bond market by leveraging the existing OTC bond market framework in China to enable participating banks in Singapore to provide trading and custody services for selected fixed-income products for the China Interbank Bond Market; and

• facilitating the expansion by financial institutions based in Singapore and China in each other’s markets ‒ the first Panda Bond, UOB’s three-year RMB5 billion Panda Bond, was issued in October 2024 and listed on the SGX.

Overview of Singapore’s Equity Capital Market 

Offers of equity securities of corporates, REITs and business trusts to investors in Singapore are regulated under the SFA, which requires all offers of equity securities to be accompanied by a prospectus and a product highlights sheet registered with the MAS, unless otherwise exempted.

The SGX is the main stock market in Singapore. Equity securities are listed and traded on the Mainboard and the Catalist Board of the SGX, with the latter board focused on fast-growing enterprises.

Issuers seeking a listing on the Mainboard of the SGX must satisfy quantitative and qualitative requirements. These include profitability tests requiring an operating track record of at least three years and either a minimum pre-tax profit of SGD30 million in the latest financial year or being profitable in the latest financial year and a market capitalisation of SGD150 million upon listing. Issuers may also satisfy the market capitalisation requirement (only) of SGD300 million upon listing. There is no restriction on the issuer’s jurisdiction of incorporation. Issuers with multiple voting shares meeting certain criteria can also list on the SGX.

Issuers seeking a primary listing on the SGX will need to comply fully with the SGX listing requirements post-listing. Issuers listed on other markets may apply for a secondary listing on the SGX – such issuers do not need to comply with all of the SGX’s requirements post-listing. Issuers in developed market jurisdictions and in certain regional markets comply principally with their home market requirements and put out reports on a similar basis (in English) on the SGX.

There are no financial or market capitalisation requirements for the Catalist Board. Catalist issuers must be brought to list by an authorised full sponsor that will continue to act as the issuer’s continuing sponsor for at least three years post-listing.

Issuers considering listing securities on the Mainboard undergo a regulatory review process by the SGX’s regulatory arm, which determines whether an issuer is approved for listing. In a public offering, the prospectus is reviewed by both the SGX and the MAS. Prospectus disclosure requirements are governed by the SFA and prescriptive requirements set out in the relevant International Organization of Securities Commissions (IOSCO) regulations, among others. For issuers seeking a Catalist listing, the regulatory review is undertaken by the SGX only.

Audited financial statements are required for the most recent three financial years (or from the issuer’s date of incorporation, if more recent), together with interim financial statements depending on the recency of the last audited financial year. Pro forma financial statements may also be required for acquisitions or disposals of a material nature or material changes in share capital.

The listing process is confidential during the regulatory review period until the lodgement of the preliminary prospectus, which typically marks the commencement of roadshow marketing. Pre-deal research reports are also permitted to be issued in compliance with regulatory requirements. There is retail participation in the IPO – in fact, the SGX listing rules provide for a minimum retail offer of 5% of the number (or SGD50 million in value) of the securities offered for subscription (whichever is lower). It is also common to have cornerstone participation alongside a Singapore IPO – these investors typically subscribe under prospectus-exempt placement rules in advance of the launch of the IPO and their committed participation is disclosed in the prospectus.

In 2024, continuing global macroeconomic, geopolitical and other factors resulted in tepid fundraising activity. While the count of IPOs in Southeast Asia remained healthy, the amount of capital that has been raised remains low. In August 2024, the MAS announced that a review group has been set up to recommend measures to strengthen equities market development in Singapore. The Singapore government had already introduced various initiatives to support enterprise financing and enhance Singapore’s equities markets. The review group involves stakeholders from both the private and public sector and will be making a recommendation on a set of measures to strengthen equities market development in Singapore. The report is expected to be finalised during the course of 2025.

The SGX attracts listings of issuers with regional or global business and operations. Consequently, adverse global market developments impact capital markets activity in Singapore significantly. Given the current pipeline of IPO-ready companies, an improvement in investor appetite will see a rebound in the number of Mainboard listing applicants. Preparation work for REIT IPOs has returned in the improving interest rate environment. There are also a number of companies looking at a dual listing and concurrent IPO on the SGX and other global stock exchanges. Based on the current activity levels, Southeast Asian markets (including Singapore) should fare better in 2025 than 2024.